Today I want to talk budgets. What is a budget?
Do you take a road trip without planning your stops? I know when I take a road trip, I have it allll planned out… planned around what restaurant I’ve seen on TV, what I want to order, and whether it’s a breakfast, lunch, or dinner spot. The driving and sight-seeing are secondary. Actually arriving at my destination… That’s just an end goal.
So why would you run your business without a plan for where you’re going? A budget is you immediate plan for your business. Just like in a road trip you know what route are you going to take TODAY, and what stops for fuel (car & food) are you going to make, your budget does the same thing for your business. It makes sure you’re on the right highway, headed the right way, and making the right stops.
A few weeks ago I prepared a budget for a client. They’re a small organization, but growing, and wanted to anticipate a 10% growth in the next fiscal year (destination). I lined out what a projected increase of 10% would look like, built around their annual fundraising events (fuel stops). Just plugging in numbers based on educated guess, I was within $1.00 of the anticipated revenue for next year.
So what does this look like for you? If you haven’t already, NOW is the time to figure out what you want your 2018 to look like. Personally, I start in about October to get rough ideas down on paper. I set my destination, and jot notes on important conferences I might want to attend (sight-seeing), or what major expenditures are scheduled for the next year (highway construction/detour!).
When I worked for the state, I would say 90% of people took off the week between Christmas and New Year’s, and I’ve continued the tradition now that I own my own firm. I use that week to lay out ALL of my goals for the next year. When January 1 comes around with it’s renewed sense of determination an purpose, I’m ready to hit the ground running. And monthly I compare myself to that plan to see where I’m excelling or falling behind, and tweak the plan accordingly.
In future posts, I’ll talk more about planning further out with forecasts, and more about the road trip analogy!